Price Increase

[kstorms27]

So with the recent price increase with buying direct from Disney, I can only wonder if their goal is to have everyone buying resale?! I mean why wouldn't your goal be to lower your prices or offer some type of incentives to compete with resale? Not raise them!! If WDW is the only place you plan to stay, why would you ever do direct as opposed to resale??

 

[DebbieB]

So with the recent price increase with buying direct from Disney, I can only wonder if their goal is to have everyone buying resale?! I mean why wouldn't your goal be to lower your prices or offer some type of incentives to compete with resale? Not raise them!! If WDW is the only place you plan to stay, why would you ever do direct as opposed to resale??

Alot of people who stop by the booths in the parks are probably not aware that there is resale. They seem to be selling out the resorts as fast as they build them, otherwise they would not be raising the prices.

 

[keishashadow]

Whatever their motives, perhaps the increase in point price direct thru DVC will increase both:

1) the current per point rental rate ($10 per point is a steal!) and

2) the value of the points members can list when they resale their current resorts, whether outright sale or just desire to trade up to a different resort or two.

naw

Seriously, Disney tends to price everything high, then turn around and offer discounts, including DVC points. Everybody loves a bargin, perceived or the real deal it seems.

 

[disneynutz]

Disney's surveys must indicate that the high prices aren't a problem and with continued pressure on non-DVD resales even DIS readers are still buying direct.

I wonder if they will continue to drive resale prices down, then start picking up contracts through ROFR for half price compared to a year ago.

Bill

 

[kstorms27]

I wonder if they will continue to drive resale prices down, then start picking up contracts through ROFR for half price compared to a year ago.
Bill

This type of strategy would seem rather silly! Spending money to make money?! I guess with a company the size of Disney and the $$ they have, small price to pay for the potential profit gain on the turnaround.

 

[Dean]

So with the recent price increase with buying direct from Disney, I can only wonder if their goal is to have everyone buying resale?! I mean why wouldn't your goal be to lower your prices or offer some type of incentives to compete with resale? Not raise them!! If WDW is the only place you plan to stay, why would you ever do direct as opposed to resale??

You're assuming that the price increase will impact sales. This is extremely unlikely, esp with incremental increases. As noted, most buyers aren't aware of resale or believe (falsely IMO) that it's better to buy retail even at a higher price. While DVC is an exception only to a degree, timeshares are generally sold rather than bought as an informed purchase. Why would one pay say $20K for a timeshare they could get for $500 but it happens every single day. The price difference for DVC between retail and resale is not nearly as great as most timeshares.

 

[dbs1228]

I also think DVC is preparing for the ultimate price they will charge for the Villas at Grand Floridian. It will be hard to to charge 175.00 per point for GF and have SSR at 99.00. Just a thought anyway....

 

[disneynutz]

This type of strategy would seem rather silly! Spending money to make money?! I guess with a company the size of Disney and the $$ they have, small price to pay for the potential profit gain on the turnaround.

I don't think it's silly, I think that it's business. ROFR a 200 point contract for $60.00 per point and resell the points for $120.00 each. That's a $12,000.00 profit.

Bill

 

[ssawka]

This type of strategy would seem rather silly! Spending money to make money?! I guess with a company the size of Disney and the $$ they have, small price to pay for the potential profit gain on the turnaround.

You are forgetting that each resort has a fixed number of points. Disney cannot simply create points. That's the whole purpose of ROFR. If Disney does not have enough inventory to meet demand (like BCV) they only choice they have is to use ROFR. You are correct that the profit margin would not be as great if Disney needs to buy back contracts to meet demand, but if a buyer really wants a resort that is truly sold out, is it better to make a partial profit from that buyer or no profit at all?

 

[luckyman_apd]

I don't think it's silly, I think that it's business. ROFR a 200 point contract for $60.00 per point and resell the points for $120.00 each. That's a $12,000.00 profit.

Bill

I agree. This actually could help raise resale prices. The word I've read is that Disney has NOT been using ROFR very often. Maybe that's about to change (hopefully not until I get mine through). Since every resale DVD is aware about since they have to decline it, if sales are strong enough to keep raising prices, they could start raising the resale price.

I'm sure they have a bottom line for each resort where ROFR it and reselling makes them enough money to cover the expense of reselling it. People have been saying on here that OKW has been ROFR'ed more often than others. They may have a decent waiting list for there compared to others. Only Disney knows for sure. I would expect to see more ROFR before VGF opens.

 

[keishashadow]

I was told years ago by then current guide that if DVC didn't have add-on points for my UY when the time came on to add onto our sold-out resorts, he'd put me on what he termed 'a waitlist of sorts' and the points should come thru in a few months, if not sooner. I assumed that said points would be garnered via ROFR.

 

[tjkraz]

I also think DVC is preparing for the ultimate price they will charge for the Villas at Grand Floridian. It will be hard to to charge 175.00 per point for GF and have SSR at 99.00. Just a thought anyway....

SSR will be sold out before VGF goes on sale. Perhaps AKV, too.

I don't think it's silly, I think that it's business. ROFR a 200 point contract for $60.00 per point and resell the points for $120.00 each. That's a $12,000.00 profit.

Bill

It costs far less than $60 per point to build new.

BLT has about 4.5 million points and construction figures cited range from $120 - 140 million. That's $25-30 per point to build new.

I wouldn't expect them to get active in ROFR until / unless the price falls much further.

 

[JimMIA]

What Dean said, and I don't expect DVC to get any more active in ROFR...period.

Abandoning ROFR has not hurt their direct sales. Resale prices are irrelevant to their direct sales for the reasons Dean outlined.

And they raise prices for one simple reason -- they CAN.

 

[Dean]

SSR will be sold out before VGF goes on sale. Perhaps AKV, too.



It costs far less than $60 per point to build new.

BLT has about 4.5 million points and construction figures cited range from $120 - 140 million. That's $25-30 per point to build new.

I wouldn't expect them to get active in ROFR until / unless the price falls much further.

A good guideline for timeshares sales is 50% cost (construction, land acquisition, marketing, etc) and 50% profit. I've seen nothing from DVC that would suggest this doesn't hold pretty close for them as well. There are aspects of buying up resales and reselling that is counter productive or limited for DVC. First, no matter the profit, the system simply is not set up to go that route and system tend to run along their given course. As a rule, existing resorts are harder to sell at a similar price. Most importantly, any "resale" points that are resold are in competition with other current projects that they are being judged on from higher ups. I wouldn't be surprised to see DVD get into a more formal resale mode at some point but not as long as they are in active sales of desirable properties with a good supply of points. The fact that they can take previously sold points and resell them as new is a little unique related largely to the fact that it is in effect, a trust system and not truly a deeded options (in spite of the paperwork that suggests otherwise). Marriott has backed off their resale program, but when it was active, they had a rule that they didn't resale existing properties until they were sold out or at least 7 years in active sales.

 

[kendzee94]

5 1/2 years ago when we bought direct, I was really concerned about buying on the resale market because it was so "new" to me. Our third contract was bought on the resale market (before the changes), and we saved over $35 per point via direct. If I was not on these boards and did my research, I would not have been comfortable buying resale. For instance, I was thinking, how do I REALLY know that resale store/place that is selling me the DVC contract is really legit? Compared to the outrageous prices direct for BLT and upcoming resorts, the resales prices out there are a steal. For the difference, you can pay out of pocket for the cruise you can't take with points.

There are a LOT of people out there who don't know about these boards, and know the secrets the rest of us find out from each other

 

[Dziactor]

The price increases really are amazingly high. Don't think I'd buy now even if I didn't know about resale.

 

[alice99]

I was told years ago by then current guide that if DVC didn't have add-on points for my UY when the time came on to add onto our sold-out resorts, he'd put me on what he termed 'a waitlist of sorts' and the points should come thru in a few months, if not sooner. I assumed that said points would be garnered via ROFR.

I've always thought this also....... it seemed to me that they would exercise ROFR based on what they needed, not so much the selling price.